Though not new to the litigation market, the use of TAR tools gained considerable traction in the past year. “As parties look for more efficient ways to reduce the burden of e-discovery,” says Baron, “TAR will be an accelerating trend.” With TAR becoming more widespread, 2014 has seen:

“We started a few years ago with attorneys wondering, and a handful of cases debating, if we could use these tools at all. We have passed that threshold,” explains Gilbert S. Keteltas, a partner at BakerHostetler and co-leader of the firm’s E-Discovery Advocacy and Management Team. “Now the debate is about how and when to use TAR defensibly, and whether a court will bless the outcome.”

For information on the basic technology behind TAR, common TAR tools and how best to use TAR in litigation, see Practice Note, Long Live Predictive Coding and Predictive Coding: A Primer.

The new ways in which employees use evolving technologies posed significant challenges to e-discovery practice in 2014. Counsel continues to wrestle with how to properly identify, preserve, collect and review data stored on mobile devices, social media, and audio and voice files. Although companies in some regulated industries, like financial services, have long been subject to rules governing the retention of data held by these sources, specific guidance otherwise remains scattered. “We do not yet have well-known rules of the road for these devices or technologies,” says Baron. “We are all struggling to define what constitutes best practices in this area.”

Proportionality in discovery is not new and has been the subject of litigation and negotiation since 1983, when the concept first appeared in the FRCP. However, the financial stakes and complex logistical issues that come with increased volumes of ESI have made proportionality critically important in civil litigation. Indeed, more than half of the defense attorneys surveyed as part of the rulemaking process indicated that they had settled a case due to the cost of litigation, and high discovery costs in particular, and more than half of all attorneys surveyed believed that judges did not enforce the existing proportionality limitations on their own (see Summary of the Report of the Judicial Comm. on Rules of Practice & Procedure, Rules Appendix B-6 (Sept. 2014)).

The proposed rules attempt to limit the broad scope of discovery, requiring parties and the court to consider:

(Proposed FRCP 26(b)(1).)

Many observers, while mindful of the purpose behind the renewed emphasis on proportionality, predict an increase in motion practice based on bare-bones assertions of disproportionality. Tadler emphasizes that vague objections to requests to produce are not acceptable under proposed Rule 34, which requires that the grounds for objecting be stated with specificity. She questions, however, if litigators will adequately familiarize themselves with the new rules. “One of the greatest and most troubling dilemmas,” notes Tadler, “is that even when the rules are on the books, attorneys do not necessarily read them.”

Some district court judges have also expressed concern about the application of the proportionality principles. “At one level, proportionality is not the stuff of high jurisprudence. It asks for common sense and practicality,” Judge Rosenthal says. “But judges are properly worrying about whether, given the novelty of these issues, we will be able to recognize and implement reasonable limits on the discovery sought that are fair and workable for both sides, and serve the needs of the case.”

Still, Judge Rosenthal suggests that judges will have the same kinds of choices as in the past for tailoring discovery, such as limiting the forms of production, the time period of the discovery, or the data sources for collection, or requiring the requesting party to bear some of the costs. “All of these choices have been with us for a long time with conventional paper discovery,” she says. “Now they are more complicated and varied, but ultimately, these decisions involve the same kinds of analysis we have done for years.”

Even in the face of credible evidence that companies continue to over-preserve vast stores of data for fear that some ESI might be lost, and that their actions may in hindsight be deemed negligent or subject them to drastic sanctions, the proposed rules identify no guidelines concerning the scope or duration of ESI preservation. Early attempts to incorporate detailed preservation standards into the FRCP were later abandoned as unworkable.

Instead, proposed Rule 37(e) focuses on clarifying the consequences for loss of ESI by:

(Proposed FRCP 37(e).)

“It is the hope,” says Judge Rosenthal, that the reasonable steps language and the curative framework in proposed Rule 37(e) “will have a back-looking effect, making it easier for large data producers to decide not to keep certain kinds of ESI without fear that if they fail to keep everything, they will be sanctioned for not having something.”

However, many law firm and in-house attorneys are skeptical that the proposed rule will ameliorate the problem of over-preservation. Given the absence of any guidelines, including whether proportionality can be applied at the preservation stage, “there is nothing we can do with regard to preservation but hope that once judges read, study and understand the new rules, they will take the admonition of the Advisory Committee to heart and apply the proportionality concept to preservation,” says Matus.

Baron agrees. “Many attorneys believe that Rule 37 will have an impact in reducing the volume of ESI that will be necessary to preserve in a particular litigation. If that is the case, it is a good thing,” he says. “But the jury is still out on the effect that the rules will have. Prudent counsel will always err on the side of collecting more, even with the express language about proportionality in Rule 26.”

Notably, proposed Rule 37(e) is limited to ESI, and all prior sanctions and spoliation decisional authority remain applicable to tangible items. Although this amendment generated minimal public comment, it may have big implications in the future. “I think you will see situations where it is unclear whether the evidence is ESI or not,” suggests Tadler. “For example, if a case involves an automobile and the electrical systems of the automobile are relevant to the litigation, to what extent does the information being sought fall within the rule for ESI or the rule for a tangible object (the car itself)? This area of law will create some interesting quandaries.”

As many practitioners have advocated, efficient and cost-effective e-discovery depends on both a cooperative relationship with opposing counsel, and early and active management of e-discovery issues.

Several of the proposed rules look to serve these goals. The most prominent are:

“Even more than with paper discovery, ESI discovery requires a collaboration between judges and the attorneys,” says Judge Rosenthal. “Judges cannot be removed and distant from this process in the way we could be with most paper discovery because there are so many more decisions to make and points during a case where judicial involvement is needed. The rule changes are designed to facilitate judges being involved earlier and more frequently.”

For more on the meaning of cooperation in discovery, whether cooperation is truly required, what cooperation entails and how to facilitate cooperation with opposing counsel, see Article, Learning to Cooperate.

Many companies and their counsel see great potential in incorporating TAR or other analytical review tools into information governance workflows. The market for these tools has grown considerably in the past year, with no signs of slowing (see Information Governance Initiative, 2014 Annual Report, at 22, available at iginitiative.com). Specifically, analytical tools may be employed to:

According to some proponents, TAR tools can be trained to create early warning systems, alerting companies to, for example, potential violations of the Foreign Corrupt Practices Act, or harassment or security policies. By analyzing patterns in unstructured data, TAR programs can detect risks and alert counsel to facilitate earlier corrective action.

“If you have criteria for what matters and what does not, and you can train on that criteria,” says Keteltas, “you can certainly apply certain data analytics tools to understand that data.” Doing so enables a company to avoid the costs associated with human review to determine what information should be retained. “TAR tools do not fit every situation, however. These novel applications may be better addressed through a range of other sophisticated data analytics tools rather than the type of machine learning we use in litigation,” Keteltas cautions.

Advocates commonly claim that TAR tools are well-suited either to:

However, counsel should remain cautious of the limits and claimed accuracy of TAR tools, particularly when it comes to data deletion of any kind. Matus warns that “given there is not widespread judicial recognition of these tools to replace human review in the first place, adding a preservation obligation to the mix makes one very hesitant to use the tools for that purpose.” Further, any effective machine learning program requires a base of properly coded and managed content to learn from, meaning that the output of a TAR program will be only as good as its input.

Getting an information governance program off the ground requires buy-in from both management and employees, along with a delicate balancing of the priorities of different business units. Breaking down silos and facilitating cross-departmental collaboration are among the chief challenges in managing an effective program.

Although interdisciplinary information governance committees are one recommended way to advance these efforts, “what we have in the last year is an emergence of calls for either a Chief Digital Officer or a Chief Information Governance Officer,” explains Baron. “It is necessary, but not sufficient, to bring together high-level people in the C-suite. What we need, in my view, is a single champion.”

A Chief Information Governance Officer would not replace, for example, a Chief Information Security Officer or Chief Privacy Officer, but instead would serve in a coordinating capacity between different departments and technologies. In addition to being familiar with e-discovery and records management, according to Baron, “ideally, this person would be comfortable with predictive coding, auto-categorization, analytical methods for internal risk and threat assessment, data mining methods and business intelligence.”

Some companies have already established these roles, though their titles tend to vary. Most observers expect more companies to follow suit as the specific responsibilities of the position are fleshed out over time.

“We ignore at our peril the world that we live in where almost every case, even small ones or those involving disciplines not typically associated with high-level analytics issues, involves electronic or digital data,” says Baron. Competent representation now demands a level of technological proficiency, as demonstrated by language incorporated into rules adopted by the American Bar Association (ABA) and several state bars requiring attorneys to stay abreast of the benefits and risks associated with relevant technologies (see ABA Model Rules of Prof’l Conduct, R. 1.1 cmt. 8; Del. Lawyers’ Rules of Prof’l Conduct, R. 1.1 cmt. 6; Kan. Rules of Prof’l Conduct R. 1.1 cmt. 8; Pa. Rules of Prof’l Conduct R. 1.1 cmt. 8).

Earlier this year, the California State Bar Standing Committee on Professional Responsibility and Conduct went further in a proposed formal opinion providing more detailed guidance on an attorney’s ethical obligations in complex litigation involving e-discovery. The opinion identified specific tasks that an attorney should be able to competently perform and remedial options if the attorney lacks the required level of expertise. (Cal. State Bar, Proposed Formal Op. Interim No. 11-0004.)

None of this guidance claims to impose new duties or obligations on attorneys, but these changes reflect a growing effort to underscore that technological proficiency is no longer an issue for only specialty counsel. “I do not think attorneys or judges have to be tech wizards,” says Judge Rosenthal, “but it is important to have a general awareness of the need to ensure that this aspect of a case is dealt with and that people who do have the necessary expertise are brought in to confront the problems.”

The rapid pace at which technology changes and improves poses particular challenges for litigators in competently handling both new data sources and process-dedicated tools. To stay up to speed, Judge Rosenthal encourages counsel to review the many examples of detailed guidance and emerging best practices from different sources, such as the ABA, The Sedona Conference and the US Court of Appeals for the Seventh Circuit through its Electronic Discovery Pilot Program. “We all need to keep learning this stuff,” she says plainly, “because it keeps changing.”

For more on recent guidance and current best practices to comply with counsel’s obligation to be technologically competent, see Article, Litigation, Technology & Ethics: Changing Expectations.

Recognizing the increasingly prominent role of e-discovery in litigation, law schools are starting to incorporate e-discovery related coursework into their curriculum. For example, Columbia Law School, Georgetown University Law Center and American University Law School now offer courses and clinical programs in e-discovery, typically taught by adjunct faculty from private practice. Earlier this year, Cardozo Law School launched the Cardozo Data Law Initiative, a comprehensive certificate-based program intended to prepare students for careers in e-discovery, information governance, data privacy and cybersecurity by combining coursework in these subjects with clinical externship experience in the technology industry.

All of these programs take a functional and practical approach to e-discovery education, focusing on legal and technological guidance from case law and leading organizations like The Sedona Conference. They often feature a range of guest speakers from different parts of the industry and have students conduct mock custodial interviews or negotiations with opposing counsel.

The benefits of these programs are significant. “There will be graduating law students with actual hands-on experience in how to tackle these issues,” says Tadler. “These students also have direct access to professionals in the industry and can hear firsthand how this area of the law is developing and why.”

Taking advantage of these opportunities not only prepares new attorneys to better assist their clients and supervisors in practice, but also better positions them to succeed in business development. Baron advises that “the way to get ahead in the practice of law, especially when building a practice in a difficult economy, is to build your own skill set and expertise in some manner of technology.”